These 4 Singapore Food-Related Stocks Could Deliver Delicious Returns for Your Portfolio
Singaporeans love food, as evidenced by the number of food blogs featuring savoury recommendations.
But did you know that the food and beverage sector is also a great place to look for attractive investments?
From restaurant chains and snack foods to three-in-one coffee and bottled isotonic drinks, the Singapore market offers several interesting food-related stocks that you can invest in.
Here are four food-related Singapore stocks that could deliver a tantalising return for your investment portfolio.
Jumbo Group (SGX: 42R)
Jumbo is a food and beverage (F&B) group that operates 10 different F&B brands including Jumbo Signature, Jumbo Seafood, and Ng Ah Sio Bak Kut Teh.
The group operates 46 F&B outlets across 14 cities in Asia.
Jumbo reported a robust set of earnings for the first half of fiscal 2024 (1H FY2024) ending 31 March 2024.
Revenue increased 13% year on year to S$97.1 million because of higher business volumes at its Singapore operations from a rebound in tourism coupled with a S$0.3 million franchise fee received for two new outlets.
Gross profit improved by 13.3% year on year to S$64.4 million while net profit jumped 11.9% year on year to S$8.9 million.
The business generated a positive free cash flow of S$10.5 million for 1H FY2024, 28% lower than the S$14.6 million churned out a year ago.
An interim dividend of S$0.005 was declared versus no interim dividend in the year before.
Management, however, warned of challenges in China because of the weak economy and the group is taking measures to optimise operations and enhance efficiency.
Back in Singapore, Jumbo Seafood reopened its outlet at The Riverwalk in January 2023 and the group launched a new Ng Ah Sio outlet at the Central in January this year.
The group is confident that it can manage operating costs by improving productivity and utilising resources efficiently.
Old Chang Kee (SGX: 5ML)
Old Chang Kee, or OCK, sell its range of snack products including its signature curry puffs and spring rolls through kiosks and retail outlets at shopping malls.
The group reported a strong set of earnings for its fiscal 2024 (FY2024) ending 31 March 2024.
Revenue rose 12.4% year on year to S$100.9 million with gross profit improving by 17.1% year on year to S$68.2 million.
Net profit surged by 57.2% year on year to S$9.7 million, aided by higher interest income and lower other expenses.
OCK maintained a sturdy balance sheet with S$44.1 million of cash and just S$2.9 million of debt.
The snack food business generated a positive free cash flow of S$25 million, 18.7% higher than the S$21 million generated in FY2023.
A final dividend of S$0.01 was declared, unchanged from a year ago.
Coupled with the interim dividend of S$0.01, FY2024’s total dividend stood at S$0.02, giving OCK’s shares a trailing dividend yield of 2.7%.
To tackle inflationary pressures, management will reduce operating costs, improve gross margins and rationalise the group’s operations.
The group is also looking to increase the number of outlets at strategic locations such as high-traffic transport hubs.
Food Empire Holdings (SGX: F03)
Food Empire is an F&B manufacturing and distribution group with a portfolio of instant beverages, snack foods, and food ingredients such as coffee mixes, chocolate drinks, instant cereal blends and potato chips.
Its products are sold in more than 60 countries around the world and Food Empire has eight manufacturing facilities in five countries.
The group reported a sparkling set of earnings for 2023 with revenue rising by 6.9% year on year to US$425.7 million.
Operating profit climbed 34.6% year on year to US$70.9 million while core net profit improved by 25.3% year on year to US$56.5 million.
A dividend of S$0.10 was declared and paid, more than double the S$0.044 that was paid out in 2022.
For its first quarter of 2024 (1Q 2024) business update, Food Empire maintained its positive momentum with a 14.5% year-on-year increase in revenue to US$117.5 million.
For the quarter, the group made structural changes to its local sales force in Vietnam and activated new direct consumer marketing strategies.
Management expects these brand-building efforts to help sustain growth in the country.
Meanwhile, Food Empire also completed the expansion of its non-dairy creamer production facility in Malaysia on 1 April 2024.
The group has commenced construction of an additional snack factory located next to its existing one in Malaysia and expects snack production to increase in 2025.
Elsewhere, the group plans to invest an initial US$30 million to build its first production facility in Kazakhstan which will be completed by the end of 2025.
Fraser & Neave (SGX: F99)
Fraser & Neave, or F&N, is an F&B giant with beer and dairy operations along with property development and printing and publishing.
The group manufactures and sells well-known beverages such as 100Plus isotonic drinks, F&N sparkling drinks, and Nutrisoy and Ice Mountain brands of soy milk and water, respectively.
F&N reported a strong set of earnings for 1H FY2024.
Revenue inched up 2.5% year on year to S$1.1 billion with net profit soaring 52.5% year on year to S$83.8 million.
An interim dividend of S$0.015 was declared, unchanged from a year ago.
The group secured a land lease for the construction of a new dairy manufacturing facility in Cambodia.
The new plant, which will be ready in 1Q 2026, will oversee the production, distribution and sales of F&N dairy products, with a focus on canned milk.
The F&B group also launched new products in 1H FY2024 such as Fruit Tree Muscat Grape Juice and F&N Magnolia Cookies and Cream.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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